Monthly Archives: January 2009

Why We Need an Income Statement and a Balance Sheet

Posted on January 30, 2009 | 6 Comments

reportsOr alternatively, why we need a Statement of Activities and a Statement of Financial Position, to use nonprofit-financial speak.  I was asked this question at a recent training, as I have been asked many times over the years.  I have been asked why we can’t have just one statement to show everything, one statement to make things easier.  The two reports are not a deliberate effort to confuse us but an attempt to tell the financial story of an organization.

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Posted in Governance, Nonprofit Accounting, Q&A

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News and Notes

Posted on January 22, 2009 | Leave a comment

News StandHere are some interesting news items form the last week or so.

From the Nonprofit Times comes this piece about about the cap for the US Post Office rate hike.  Thanks to a sluggish economy, the article says, when the Post Office petitions for a rate increase this year average increases will be capped at an average of 3.8 %

From the Chronicle comes this item that I could not agree with more. Marc Owens, a former chief of the IRS’s Exempt Organizations (EO) Division has called on the IRS to offer explicit guidance on what it expects in matters of governance from nonprofit organizations.  With the IRS’s new push towards governance regulation and the belief that, according to Steven T. Miller, commissioner of the IRS’s tax-exempt and government-entities division,”a well-governed organization is more likely to be compliant with the tax law, while poor governance can easily lead to trouble” it would be nice to have some kind of official guidance as to what that is.  I agree that a well governed nonprofit is probably a better nonprofit but I would like to see some clear rules so nonprofits are not the object of subjective discipline.

The IRS has announced this years small and mid-size nonprofit workshop series here.

And finally, I have updated the “New 990 To-Do List” since the final version of the form has been released.

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Posted in Governance, IRS

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More Questions and Answers

Posted on January 19, 2009 | Leave a comment

Questions?When I present trainings and workshops I always get at least one question I can’t answer on the spot and need to look up.  Here are the Questions and Answers from the week of January 12th, 2009:

  1. If our organization awards scholarships do we list that on the form 990?

    Yes you probably do.  For information about what kinds of grants and other assistance is listed in the updated Form 990 and Schedule I please click here.

  2. How long do we keep records for donations to our nonprofit?

    At least seven years after the donation.  Many organizations keep them permanently but that is up to the organization.

  3. When we pay someone a stipend do we have to give them a 1099 at the end of the year?

    Yes you do as it is considered “non-employee compensation.”  Please check out the IRS’s 1099-Misc information here.

  4. Where can I find more sample policies and procedures?  Specifically ones that the IRS is asking for?

    updated Form 990 The Yolo Community Foundation has put theirs online to promote good governance, please check them out here.
    Also the National Council of Nonprofits has some good samples as well.

  5. Do raffle and auction winners get a donation thank you?

    Yes, if they end up paying more than market value for the item they recieved.  Check out this nice piece from the IRS that is all about contributions and specifically take a look at the examples that start on page three.

Did I miss any?  Ask them in the comments below or email me.

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Posted in Governance, IRS, Nonprofit Accounting, Policies and Procedures, Q&A, Tax Forms

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